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Raytheon the target of Adelaide rally

Nick G. 12 July 2019

Twenty members and supporters of the Independent and Peaceful Australia Network (IPAN) rallied outside Adelaide’s Raytheon headquarters last Tuesday opposing its role in any US attack on Iran.

They held banners and placards directed at passing peak hour traffic along busy Greenhill Rd, attracting thumbs up, waves and horn beeping from passing motorists. A Spirit of Eureka banner read “No Australian involvement in US wars of aggression”.

Raytheon has offices in every mainland state and territory of Australia. It has had research and manufacturing facilities at SA’s Techport “defence” precinct for a number of years, and has recently announced a new facility at Mawson Lakes, north of Adelaide, to enable the system delivery and final assembly of the National Advanced Surface to Air Missile System.

The possibility of Raytheon making a killing from the use of its weapons in a US attack on Iran has certainly interested investors. Imperialist war is great for finance capitalism. Raytheon CEO Thomas Kennedy makes no secret of the windfall profits of a war of aggression:

Large arms manufacturers from across the industry have similarly told investors that escalating conflict with Iran could be good for business.

Thomas Kennedy, the CEO of Raytheon, was asked in January about the “demand signals” that could shape the defense budget going forward. Kennedy, according to a transcript of the call, said the “major concern there is Iran.” The company, Kennedy added, had recently won approval to provide missile defense systems to Saudi Arabia, as the country has ramped up defense systems in preparation for potential war.

The following month, Kennedy presented at the Cowen Aerospace conference for investors, again focusing on how conflict with Iran will boost revenue. Kennedy said he had spent time on Capitol Hill discussing “all the information that we’re seeing from Russia and from China and to a certain degree even still North Korea and then what Iran is doing.” The discussions in Washington, D.C., he said, left him “pretty optimistic about the U.S. budget moving forward.”

But could an escalation between the U.S. and Iran into an actual shooting war rev this group (aerospace and defense stocks) up even further? Of course, and that's the move that traders want to consider.

Moving from the general to the specific, the U.S. drone that was allegedly downed by Iran Thursday over the Strait of Hormuz was an RQ-4A Global Hawk, manufactured by Northrop Grumman (NOC) . This drone reportedly carries an astronomical cost to the Department of Defense of $222 million per unit.

That said, the capabilities of this particular Unmanned Aerial Vehicle (UAV) are astounding, and the future of warfare is in unmanned smart equipment. I believe the "smartness" will come from the sensor systems, which in the case of the RQ-4A are produced by Raytheon (RTN) .

So, while my knowledge of aerial combat ranges only as far as repeated viewings of "Top Gun," I think Raytheon might be a better trade on UAVs than Northrop Grumman.

This speculation on the profit to be made from warfare is the sickening face of the criminal system we call capitalism.